PH withdraws from second cycle of U.S. aid packages

Pia Ranada
PH withdraws from second cycle of U.S. aid packages
The withdrawal from the second cycle of Millennium Challenge Corporation grants comes after the Philippines' scores on rule of law and corruption drop in the aid-giving body's scorecard used to determine beneficiary countries

MANILA, Philippines – The Philippine government has decided to withdraw its application for the second cycle of grants from the United States aid-giving body, Millennium Challenge Corporation.

“We have opted to withdraw from the second Millennium Challenge,” announced Presidential Spokesman Harry Roque said on Tuesday, December 19 during a Malacañang press briefing.

The decision, supposedly made with the help of the economic advisers in the Duterte Cabinet, was due to the government’s wish to prioritize Marawi rehabilitation for funding.

The acceptance of a grant from the MCC would require the government to cough up counterpart funding for projects the grant would finance, said Roque.

“We are confident that the US government fully understands the decision to reallocate our funding priority for this year and that this will not, in any way, adversely impact our eligibility for another round of compact assistance in the future because it calls for counterpart financing as well,” he said.

The first compact from the MCC was credited by Malacañang for the implementation of the secondary National Road Development project, Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, and Revenue Administration Reform Project of the Department of Finance.

The decision to withdraw was already handed to the MCC by Philippine Ambassador to the United States Jose Manuel “Babe” Romualdez.

Roque said the withdrawal does not mean the Philippines will never accept grants from the Millennium Challenge Corporation.

“This is temporary. We will apply again,” he said.

Concern over drug war

Roque denied that the Philippines’ withdrawal has anything to do with criticisms by US officials of President Rodrigo Duterte’s controversial campaign against illegal drugs.

However, the withdrawal comes after the Philippines’ “rule of law” rating dropped in the MCC’s scorecard used by the aid-giving body to determine which country’s can receive grants.

In the same scorecard, the Philippines’ rating on control of corruption also dropped.

The MCC scorecard is part of a 4-step process to identify countries eligible for MCC assistance.

In December 2016, the MCC decided not to renew a major aid package to the Philippines because of “significant concerns” about the rule of law under Duterte whose drug war has killed thousands and brought to the fore abusive practices of police implementing the campaign.

The previous 5-year grant, which was worth $433.9 million, expired in May 2016.

US embassy spokesperson Molly Koscina said in December 2016, “MCC will continue to monitor unfolding events in the Philippines and underscores that all country partners are expected to maintain eligibility, which includes not just a passing scorecard but also a demonstrated commitment to the rule of law, due process, and respect for human rights.”

In reaction to the non-renewal of the MCC grant, Duterte had said said, “We’ll be glad to lose it. I also suggest they start packing.”

Following Duterte’s pronouncements, the Department of Foreign Affairs has said the Philippines would not accept aid with “conditions.” – Rappler.com

Pia Ranada

Pia Ranada is a senior reporter for Rappler covering Philippine politics and environmental issues. For tips and story suggestions, email her at pia.ranada@rappler.com.